The BioStrat Brief · Amandeep Singh, Ph.D. ·
What Founders get wrong about the Fundraise
Practical lessons from life sciences fundraises: lead with your strongest card, size the round to the milestone, build a capital stack and read past the headline valuation.
Practical lessons from advising life-sciences companies through their fundraises.
Every founder believes the raise is won on the strength of the idea. It isn't. Over the last year I've sat inside the fundraises of some very different life-sciences companies: a rare-disease genomics platform, an IVF-microbiome diagnostics-and-therapeutics company, a computational oncology startup building protein degraders, a revenue-stage AI company selling into pharma commercial teams, an ultra-sensitive binding detection technology, and advised a few from afar.
What separated momentum from stall had almost nothing to do with the science and almost everything to do with how founders engineered the raise. A raise is, at bottom, the pricing of a milestone. Storytelling gets you into the room; composition closes the round.
Lead with your strongest card
The common mistake is opening with what you love most rather than what the investor buys first. The skeleton is standard: problem, why now, solution, proof, team, ask - but which card you play first depends on your hand.
The oncology company was pre-data, so its strongest card was pedigree, not traction; we moved the team slide near the front and folded the founder's three decades of relevant work into it, because when you have no revenue and no clinical proof, credibility is your traction.
The revenue-stage company had the opposite luxury: real contracts. So it led with them: anchor-customer logos on the opening slide, redacted screenshots of signed agreements as proof, and momentum as the pitch. The contracted dollars tell an investor more than any market-size slide.
The genomics company had two stories: a diagnostics business and a drug-discovery ambition, and kept trying to tell both at once, which confused everyone who saw the deck. The fix: lead with diagnostics, the near-term, revenue-bearing, fundable story; hold drug discovery as the second act; and re-story the deck around a single base “one solution, two outcomes”, so the two halves stopped fighting each other.
Read your own hand correctly. A founder who opens with pedigree that doesn't fit the thesis, or with the "traction" that is really pipeline, plays a strong card badly and loses more than if they had led plainly.
Size the round to the milestone, not to your ambition
Founders routinely pick a headline number because it sounds serious, or their competitor has raised that much, and then reverse-engineer a story to justify it.
The better discipline is to size the round to the next value-inflection milestone plus the runway to reach it and stop there. The next clinical/data readout, the next commercial value inflection point, next product validation. Budget the amount thoroughly, not hypothetically, put real quotes from potential vendors, team size etc., then add a buffer for failure and potential unseen delays in raising the next round.
Be honest about what a round costs you, because dilution is the real price of capital. On current market data a seed round dilutes founders by around a fifth, a median near 20%, and a Series A by roughly 18%, with the most common outcome being to sell 20-24% of the company; stack two rounds, a fresh option pool and founding teams typically hold about half the business after Series A.
Build a capital stack, not just a round
The best founders sequence sources to de-risk each stage while surrendering as little ownership as possible. Non-dilutive capital comes first, a competitive grant is a third party vouching for the science before any investor writes a cheque. Venture debt buys months without repricing the company once there’s a backer to lend against. Grants, debt, tranches and equity aren’t alternatives; they’re layers to stack in sequence.
Anchor valuation to a method and an investor's return; then keep it in your back pocket
Valuation is where founders are least rigorous and most emotional, the ones who held their numbers had a defensible basis for them.
Build a model, any model - comparables, DCF, or an investor IRR target of 30–50%. But also know a model is a model. For a pre-clinical biotech, a DCF is fiction; the honest anchors are comparable deals, the cash cost to the next milestone, and what an acquirer eventually pays.
The number matters less than the reasoning it forces: what has to be true, which assumptions the case rests on, where it’s fragile. A founder who built the model defends it live; one who borrowed it folds the moment an investor pushes.
Read past the valuation on the term sheet
Early-stage founders fixate on the headline number and skim the terms that decide who keeps what.
Then read the economics, because this is where value quietly leaves the founders' side of the table.
The liquidation preference, who gets paid first in an exit: 1x non-participating is the market standard and you should accept it without a fight. What you must resist is anything richer. A 1x participating preference lets the investor double-dip, taking their money back and then sharing the rest as if they hadn't, which on a $40M exit can shift something like $7.5M from founders to investors; any multiple above 1x is worse still.
The option pool is the quietest term on the page: a 15% pool carved out of the pre-money, the structure in over 95% of term sheets, silently cuts your effective valuation to about 85% of the headline number, so negotiate the pool down and tie it to a real eighteen-to-twenty-four-month hiring plan rather than a round figure.
On anti-dilution, weighted-average is standard and acceptable; full-ratchet is a red flag that punishes you brutally if you ever raise a down round.
On control, a balanced early board is one investor seat, one founder seat and one mutually agreed independent; be wary of any structure that hands investors a board majority before they have earned it.
Learn jurisdictions, ratchets and everything else very clearly.
Choose investors for the signal, not just the cheque
Who sits on your cap table is itself a term. A brand-name multi-stage fund writing a small seed cheque looks like validation, but if it later declines to follow, the market reads the silence as a verdict. A smart-money seed backer who follows on roughly doubles your Series A odds. For companies whose exit is a strategic acquisition, a corporate or strategic investor early is a feature. A generalist who doesn’t understand the science costs you a quarter and adds nothing to the syndicate.
Other things:
Never dress a verbal commitment up as revenue; the founders who inflate here lose the room the moment diligence opens.
Line up your six-to-eight reference calls before anyone asks
Run the raise like a pipeline: shared tracker, weekly checkpoints, segmented lists, not a series of hopeful coffees
Our view
The founders who raise well not only the best storytellers in the room, but they also treat the raise as an engineered system, not a pitch. None of the above actions and suggestions is a guarantee: a sound raise still loses to a bad market or a milestone set in the wrong place, and the honest cases here are still in motion. But the architecture is the part you control. If you are a first-time founder, spend as much time on it as you spend on the deck, because the investors on the other side of the table already have.
First published in The BioStrat Brief on LinkedIn, 4 August 2026. Subscribe to The BioStrat Brief for a dealmaker's take on M&A, fundraising, strategy and markets in life sciences.